Dick's to Pay $10 Million to Squash Overtime Suit

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By Chris Opfer

Dec. 11 — Dick's Sporting Goods Inc. has agreed to pay $10 million to settle a class action for unpaid overtime wages, according to the terms of a settlement that a federal judge preliminarily approved Dec. 11.

The settlement would resolve claims by six workers alleging that Dick's misclassified them as exempt managers under the Fair Labor Standards Act. It would also cover a class of employees who worked in Dick's stores across the country in the three years leading up to the litigation.

The agreement comes as the Labor Department is working to finalize a rule to enhance overtime protections for workers and has signaled that it intends to crack down on worker misclassification. Dick's agreed in 2011 to shell out $15 million to resolve a class action by workers alleging they weren't compensated for time worked during meal breaks and time they were required to be at work after their scheduled shifts.

Judge Richard G. Stearns of the U.S. District Court for the District of Massachusetts said the court will consider whether to grant final approval of the settlement after an April 1 fairness hearing.

The workers held various assistant store manager positions at stores in Massachusetts, Pennsylvania and Georgia. They said Dick's classified them as exempt from the FLSA's requirement that employees be paid time-and-a-half wages for all hours worked in excess of 40 per week.

Although they were paid salaries, the workers argued that their jobs didn't involve the type of managerial work covered by the FLSA's “white collar” exemption. They didn't have the authority to supervise other workers and delegate tasks or to discipline, hire or fire other employees, according to their complaint.

Dick's didn't admit liability as part of the settlement. Instead, the agreement states that the company “denies that it violated the law in any manner and specifically denies that it violated any statutory or common law alleged in the Wage-Hour Lawsuits.”

For More Information

For more information, see Compensation and Benefits Library's FLSA Exemptions chapter.

To contact the reporter on this story: Chris Opfer in Washington at copfer@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com